The Securities and Exchange Commission is seeing an “appreciation” in company boardrooms “of the importance” of cybersecurity threats, Securities and Exchange Commission Chairman Jay Clayton said Monday.
“We’re seeing increased expertise in the boardroom” on cybersecurity, he says, as companies look beyond cyberattack prevention. They’re saying: “We’ve got this suite of data we need to protect. How can we wall it off? How can we segregate it?” Clayton said at a conference on regulatory developments held in Washington by the American Institute of Certified Public Accountants.
Companies, Clayton added, are also assessing which information they actually need. “What are the things we do need to do our business? Are we collecting them in a way that we can best protect them?” Having “not just a backward- looking conversation, but a forward-looking conversation in the boardroom is essential to moving this [cybersecurity] issue forward.”
SEC Chief Accountant Wesley Bricker said at the conference that technology “can be an ally to companies in their financial reporting activities.”
Technology, he said, “enables good reporting in many, many instances. Technology also enables good auditing, in many, many instances. So it’s an ally in advancing things.” While technology can also “be the opponent; it doesn’t need to be. Reconciling that difference is understanding what technology is designed to do and what it can do, and also what its limitations and risks are. What we don’t want to achieve is a lower-quality reporting system just because we’ve augmented it.”
In other words, he continued, “it’s a balancing of a technology and innovation mindset but also not missing the human element — the human intelligence element of financial reporting.”
Clayton added that while he’s all for “technological innovation,” the “human element of what we do, I think it’s as important today as it was when I started doing it.”
The increase in technology use, Clayton said, “has not led to any decrease in the importance of human capital to these processes.”
As for talent supply chain, Bricker said his office is “hiring for a diversity of perspectives,” including those with expertise in tech, accounting or law, economists, academics, auditors and preparers.
Clayton noted that the commission’s strategic plan, released in early October, has three core elements — protecting main street investors, being flexible and investing in people. “Seventy percent of the SEC’s spend is people,” he said. “The rest of it is office space and technology, essentially. It’s important to me that we continue to attract very high quality people to the SEC.”
— Check out SEC Chair Clayton Lays Out 2019 Regulatory Priorities on ThinkAdvisor.